Rio Tinto, Chinalco to develop West Africa mine

Mining giant Rio Tinto Ltd. and China's Chinalco have signed a deal to develop an iron ore reserve in the West African country of Guinea.

The nonbinding joint venture agreement covers rail and port infrastructure as well as the Simandou mine itself, the Anglo-Australian miner said in a statement Friday.

The deal comes after Rio Tinto last year angered Chinalco by scrapping a $19.5 billion tie-up over Australian fears it would give a foreign company a strategic stake in one of the country's biggest industries.

Rio Tinto owns 95 percent of the Simandou project, with the remaining 5 percent owned by the International Finance Corporation, the financing arm of the World Bank.

Under the deal, Chinalco will acquire a 47 percent interest in the joint venture by providing $1.35 billion to fund ongoing development during the next two to three years. At the end of that period, Rio Tinto will own 50.35 percent and Chinalco 44.65 percent, the statement said.

"We have long believed that Rio Tinto and Chinalco could work together on major projects for mutual benefit," Rio Tinto CEO Tom Albanese said in the statement.

The Guinean government holds an option to buy up to 20 percent of the project, the statement said.